They love their country. As such, it is no surprise that many veterans would want to continue to serve their nation after discharge. It is why so many vets apply to work for the federal government. That partnership seemed to work out for both parties—until recently.

 

For those of us who have served in the military, we have done so out of love for our country. When it called, we stepped up. In exchange, we learned a lot of good things in the armed services. For me the list is long. Leadership, teamwork, a strong work ethic, the ability to handle stressful situations, self-direction, and motivation come to mind. I am sure I have missed some.

 

These attributes make vets an incredible asset in the workplace; something long recognized by the government. Working for the government was a marriage made in heaven for many vets. Many veterans viewed working for the government as a way of extending that sense of purpose and belonging they found in the military. Not only could they continue serving their nation, but they could also help their peers outside of active duty. 

 

In addition, the federal government, recognizing their value, offers a "veterans' preference" which puts vets at the front of the line when choosing qualified candidates for employment. The Veterans' Preference Act was established in 1944. It entitled veterans who were disabled and/or served on active-duty preference for virtually all government jobs.

 

The trend was self-reinforcing. The more veterans that worked for the government, the more the atmosphere of camaraderie and understanding among co-workers deepened. Another attraction is the government's generous retirement benefits that allow a vet's years of military service to count toward their federal pension.

 

Given this background, it should be no surprise that veterans made up 28 percent of the federal workforce in 2024, compared to 5% in the private sector, according to the U.S. Office of Personal Management (OMB).  Of that number, more than 200,000 vets are disabled or have a serious health condition.

 

Unfortunately, the Department of Government Efficiency (DOGE) has failed to account for veterans in its campaign to reduce the federal government workforce. What is worse,  veterans are spread out throughout various government departments, which makes downsizing even more dicey for this group.

 

Military veterans have tended to affiliate with the Republican Party and its candidates historically. About six in ten registered voters (61 percent) who say they have served in the military or military reserves supported President Trump in the 2024 presidential election, according to the Pew Research Center. In the past, President Trump has favored veterans on various occasions including improving VA healthcare, education benefits, and reducing homelessness among vets, but not this time. 

 

Many Republican legislators, while publicly cheering the administration's push to cut federal government workers and services are privately attempting to backchannel the powers to be on behalf of veterans. They are not only concerned that the dismissal of military veterans will alienate their base but are also concerned that many federal services that veterans depend upon,  like the Veterans Administration, could be cut back as well. That is already starting to happen.

 

The federal government has dismissed 1,400 VA probationary employees this month although a few senators have succeeded in getting the Trump administration to reinstate some fired employees. 

 

The new Secretary of the Department of Veteran Affairs, Doug Collins, a career politician, who once served a brief stint as chaplain in the U.S. Air Force Reserve, crowed on the DOGE social media conduit, X,  that he has found $2 billion in savings thus far by axing outside contractors who do things like train and coach vets seeking jobs in the private sector. He promises even more cuts in the future. Collins also urged viewers not to let senators, congressmen, and the media scare us into stopping his downsizing efforts.

 

I come down on the opposite side of his argument. Finding and keeping a job is crucial to many veterans transitioning into civilian life. Reconnecting with society through jobs is particularly important during this period. As it is, veterans face higher unemployment rates and poverty levels than non-veterans, making employment even more vital for their economic well-being. Doubly so, for those who are handicapped. The VA is an important backstop in these efforts as well.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.